SHALE GAS IN INDIA

• Shale gas is often described as a game changer in energy politics, prompting Daniel Yergin and Robert Ineson to define it as “the biggest energy innovation of the decade.”
•  India is a fast developing country and energy is pivotal to maintain its steady economic growth, stability, and development. As the third-largest energy consumer in the world, where coal still dominates the energy mix – coal imports increased to a record 135 million tons in the last fiscal year – shale gas can represent a promising alternative, both in terms of costs and environmental impact thanks to its potentially lower emissions. 

DISCOVERY & CURRENT RESEARCH:

•  In 2002, Reliance Industries, a leading Indian energy company, discovered 14 trillion cubic feet (tcf) of natural gas in a reservoir in the Krishna-Godavari basin in shale formations, generating high expectations for future production.
• Current research has identified six main basins that could be successfully exploited once the Indian government reveals its national shale oil and gas policy: Cambay (Gujarat), Assam-Arakan (North-East), Gondwana (Central India), Krishna Godawari onshore (East coast), Cauvery onshore, and Indo-Gangetic basins. 

 CHALLENGES:

• Water, in particular, will represent a major challenge for Indian shale development. The large amount of water required in the process of hydraulic fracturing, or “fracking,” is a considerable obstacle in a water stressed country such as India, which continues to suffer from chronic shortages.
•  Land acquisition and the relocation of displaced people will be problematic. Further to this, India’s population density could make recovering resources more difficult.
•  The energy infrastructure of the country requires extensive development.
•  The regulatory and pricing framework in India is very complex and represents another issue of concern for investors. Price regimes, in particular, need to be reformulated and deregulated, with the elimination, at least in part, of the heavy subsidies provided by the government, which lead to substantial differences compared to market prices.

 CONCLUSION:

•  The challenges posed by the current energy infrastructure, gaps in the regulatory framework, and public environmental concerns, together with the uncertainties over the amount of effectively recoverable gas, will represent real obstacles for New Delhi. However, if they can be overcome, shale gas could certainly have a positive impact on the country’s energy security and on the future competitiveness of India’s economy.